Reduction of employee EPF rate from 11% to 7%

As announced by the Malaysian Government the statutory contribution rate for employee contributions will go down from 11% to 7%, starting from April 2020 to December 2020. The new rate is in line with the Government's announcement on the 2020 Economic Stimulus Package 2020 on Feb 27. Employer’s contribution rate remains no change.

The new statutory contribution rate for employees applies to those below 60 years old who are liable for contribution. However, the statutory contribution rate for employees aged 60 years old and above remains unchanged.

What should I do on this change?

As an employer, you have two options:

Option 1 - Employee who choose to follow the new minimum contribution rate of 7%